Financial statement data of Northwest Fence, Inc., include the following items: Cash ...................................................................... $ 25,100 Short-Term Investments
Question:
Financial statement data of Northwest Fence, Inc., include the following items:
Cash ...................................................................... $ 25,100
Short-Term Investments ................................................... 27,300
Accounts Receivable, Net ............................................... 108,400
Inventory ................................................................. 115,300
Prepaid Expenses ......................................................... 12,800
Total Assets .............................................................. 658,700
Short-Term Notes Payable .............................................. 45,000
Accounts Payable ....................................................... 111,000
Accrued Liabilities ........................................................ 44,000
Long-Term Notes Payable ............................................. 161,000
Other Long-Term Liabilities .............................................. 37,000
Net Income ............................................................... 77,000
Number of Common Shares Outstanding ............................... 40,000
Requirements
1. Compute Northwest Fence's current ratio, debt ratio, and earnings per share. Assume that the company had no preferred stock outstanding. Round all ratios to two decimal places.
2. Compute each of the same three ratios, after evaluating the effect of each independent transaction that follows.
a. Purchased merchandise of $40,500 on account, debiting Inventory.
b. Issued 8,000 shares of common stock, receiving cash of $80,000. Use total shares outstanding at year-end instead of average shares outstanding.
c. Borrowed $70,000 on a long-term note payable.
d. Received cash on account, $15,000?
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